Transformation of Samruk-Kazyna Fund continues and the implementation of changes in the HR processes has been completed by now. Forty percent of the Corporate Centre staff was renewed, and the young citizens of Kazakhstan who have gone abroad to study and work, were persuaded to return home and join the newly recruited team. In an interview with Vlast, Ulan Tazhibayev, Managing Director for Human Resources Management, Samruk-Kazyna JSC explained how the company works, what are the challenges facing the new staff and what challenges are still ahead to be solved.

- Mr. Tazhibayev, six months ago we had a conversation where you have made many promises regarding the future transformation of Samruk-Kazyna. What has been done and what changes occurred during this period?

- Yes, back then I made a number of public statements, knowing that they will have to be fulfilled. We talked about that we are planning to try an unprecedented step: the transition to a completely new structure and model, that we are going to restructure our work process. For HR it is very important to have a well thought-out structure. What indicates it was well thought-out? The fact that we first developed a strategy, and only then the business model that ensures the implementation of this strategy. When we had a new strategy for the management of companies, we needed to optimize our operations, invest in new industries and so on. Then, we have identified our priorities: commercial unit (strategists, optimizers, the development of new industries) and monitoring unit (financiers, lawyers, compliance, risk managers, corporate governance). And by itself was our back-office, the support unit. For HR department this order gives the opportunity to work, because we can clearly understand: here is the priority, the unit that works on our main activity. We primarily serve their interests in terms of wages, development, training, and so on. Those at the forefront must always operate efficiently, be operable. In addition, we talked about making the transformation an open, transparent, and a very adequate procedure. It was not easy, but we did it.

- What kind of difficulties you had to deal with?

- The problem was that what we did was not just an evolutionary step - it was rather revolutionary. If it were evolutionary, we would go the following way: corrected 10-15% of our model that was in service, and that is all. And what we did was a completely new structure and model, basically a new company. As if we closed down Samruk-Kazyna, set up a new company and begin everything from scratch. In this sense, from the point of view of the people, it was not as easy as writing it all on a paper. Every person is a professional with his life, life of his family and laws that must be respected. And there could be a lot of problems, starting with the fact that people can be unhappy about what happened to them. We thought for a long time, about how to make sure that everyone understood: everything we do is correct from a legal point of view and fair in human terms. Again, what was the problem? Samruk-Kazyna was a normally operating company with gradually growing performance. That is, people did what they were required to. And then we changed the model, almost completely reshaped the organization and changed the requirements for the people.

- What exactly has changed?

- For example, we have significantly changed the approach to planning management, to budget planning, data management. We had a separate budget department, which took a large space, it ceased to exist. These functions were partly given to strategists, partly to the financiers, and partially to management accounts department. Therefore, we needed follow-ups with people. As a result, we came up with this approach and implemented it in full. We explained it to everyone and it was a great session, the so-called ‘town-hall’, where the chief executive officer explains his colleagues an important and critical moment for us: we are going to do something big and you are going to have to prove your skills and prove your compliance. However, the most important thing is that everything will be fair, transparent and you will know all the results, you will clearly understand what is happening and why. As a result, all employees were taken off the payroll except CEO. I have not heard about similar experience abroad, but in here, I am certain it was for the first time. We removed them from the payroll and announced that now we are going to have a new structure, with completely new requirements.

- What has changed in the qualification requirements for employees?

- We used to have requirements, for example for Director of the Department for Investment: at least seven years of experience in the professional field, at least three years in a managerial positions, higher education, knowledge of normative documents, presentation skills, business communication skills, knowledge of the language. A little common. Now the requirements are more profound: work experience as a CEO or managing director in the industry for more than 3 years. Or successful launch, development and management of a project with the volume of seed financing amounted to more than $ 10 million in national wealth funds or recognized private equities, investment or diversified holding companies, large industrial companies or recognized consulting firms. So basically we have narrowed and deepened the requirements for candidates. Candidates are not limited to having an experience in a certain area but also required to be successful in a particular direction. And in a large company rather than small. We have also strengthened requirements to have such key skills as proven deep skills in financial analysis, proven experience in conducting complex negotiations with investors and management skills at the level of building strategies.

- But, objectively speaking, we have only a few such specialists. It is no secret that the country has a shortage of qualified professionals, and especially managers of this level.

- We also had this question. This is a very good question. And we were afraid that we would not find them. We would try to look for, but if it would not work, at least we could be able to explain that we have searched for pros, looked through hundreds of people and only managed to hire the people we found, ‘as it is’ as they say. In fact, finding a highly qualified staff is a complicated issue. We were hoping for the Bolashak programme, which has more than 15 thousand Kazakhstanis that completed their studies with them, which would already serve as a certain basis. In addition, we are collaborating with the KazAlyans NGO, an association of our nationals abroad. And according to their data, about 70 thousand Kazakhstanis either studying or working abroad. So there was certain potential. Another issue was to reach out to these people, let them know that we want them back home, that we want to see them, meet them, as a minimum. And we started to work actively in this direction. We organized meetings, Mr. Shukeyev (Chairman of the Management Board) went and met with these students and working professionals, talked about the transformation. We rebuilt our website, divided it into sections, called to join, make the most user-friendly interface. Everything to make sure people see that we have changed. I think in many ways we have succeeded, because people started to show some interest, reacting to these calls and appeals.

 - So you are telling us that our nationals abroad gave up everything they had there and returned home to work for you?

- Yes, right, right. Although, we were a bit sceptical as you are right now. Frankly speaking, certain degree of scepticism remains even now.

- Let’s be honest: I have enough friends who have gone abroad and said that they are not coming back to Kazakhstan...

- Exactly. This is what these guys told us. We held our first meeting out in London, and they told us: "Well, please excuse us, but why should we even move? We broke free. Then, achieved our hard-earned current positions, began to build our careers here. How can we give it all up halfway and get back to you?" However, it all depends on how you look at it. If you look at the foreigners who join us – it is a normal step for them. They worked there, then they come and work here for a year, three, five, and it will be just another place of work. Moreover, by world standards, our fund is not small. So, in this case the geography does not matter, what matters is the company. So we tried to show these guys their future. And then I noticed one thing: for the guys that are still building their careers, it is hard. But those who are already an accomplished experts, they are more confident, they are not going to lose their labour market value, regardless of whether or not they will return, and they know it. We were in need of exactly these kind of people. And today I can see that we have achieved good results, it is still amazing even for me.

- At the same time you were working on reshaping the HR function....

- Yes, our HR got to a completely new level. Our staff that stays with us right now have a different level. They are capable to work with the candidate, without losing candidate’s focus, attention and interest. For example, we have found a professional for the HR who has worked in various countries, including the United States, West Africa countries, and in a large US company for the past few years. The second expert has been working in British American Tobacco for the last eight years, which implies he works in compliance with the international, global company standards. They were our nationals who have achieved such positions, meeting highest requirements. I have to admit that now it is much easier to work. It is not necessary to teach: these people know what to do, and we are on a completely different level now, working on all the initiatives.

- You mentioned earlier that the fund has 219 employees. It was expected that after the transformation, the company would lay off 15% of staff, but in fact, it turned out to be more.

- 219 was our regular staff, we cut 15%, some jobs were outsourced, some jobs were delegated to shared service centres. We are creating a Shared Services Centre for HR. In situations when we have several organisations operating within one group, and each one of them has its own HR department. Why do we need to keep an HR department for each of them? Why not create a single HR department with shared service centre, operating for all of them. So, for example, instead of keeping 30 people in 5 companies, we can leave ten, automate the entire process, and these 10 can do all the work. Now there is a huge programme we running to create shared service centres, it includes Samruk-Kazyna, United Chemical Company, Tau Ken Samruk, KazMunayGas and a number of its major subsidiaries, Kazpost, Samruk-Energo.

Moreover, we have opened 79 vacancies, which is more than 40% of our Fund's staff. Seventy-nine vacancies were open on a competitive basis, we have already filled 44 of them and the competition continues. We received more than eight thousand applications, and this number is constantly growing.

If we go back to the beginning of our conversation, I mentioned that we took our staff off the payroll, but warned them: "We are giving you the opportunity to move into the new structure, to work at any position. You can submit your applications; we are announcing an internal recruitment competition." They submitted, several people for one job position, and we interviewed them all. There was nothing negative about it, because we did not tell them: “I'm sorry guys, but you're cut.” People feel when they are treated fairly. He had a chance to take the position, but he could not.

As a result, the staff was 40% new. We wanted to create a critical mass of new people who are susceptible to changes and are capable to build something new. And we did it.

- Does it mean that you, along with everyone else, had to pass this test and an interview as well?

- Of course. As soon as I was off the payroll, I began to look for a job. Because it is always necessary to check yourself, compare yourself with the market, find out what you worth and how demanded are your services. We should not rest on one position – it relaxes. It gets so bad that you finally become dependent on that job. And if you know what you worth on the labour market, you are independent. At any moment, you can just quit and move on. We should always evaluate ourselves. It is a very good practice. And, you know, when I was negotiating, at some point, there was even a moment when I thought, "Why not?" There was a temptation to try. But the projects that we have started, needed to be continued, there are many things that you cannot just give up, and there are people who hope and believe in you. There is a chance to complete these projects in a year or two and afterwards proudly proclaim that: "Yes. I did it."

- You mentioned about the fresh blood joining the team. What finally changed with them on board? Are there any results?

- All new employees are working by the new procedures. We have revised all of our business processes and aligned them. I admit that this process was very difficult to implement. Because it was necessary to do the ongoing work as well. Today, we have almost 85% of the staff speaking English. From 1 September, we have completely switched to Business English within the company. All meetings, working groups, any correspondence, everything is in English. We oblige employees, because we do a lot of work with foreign partners. And it is very important not just to know the language, but also be fluent, be able to successfully pursue their goals during negotiations. It is not always possible through a translator: the conversation loses its tempo and you cannot hear all the details. Therefore, we focused on the fact that all units should be able to speak Business English. We moved from one state of the company to a qualitatively new one. This is a completely different organization now.

- You mentioned that remuneration is one of the sensitive issues during negotiations. Why exactly? 

- Like any company, let alone a state-owned, we are monitoring the money, we are very careful with them. And our key issue was the fact that we had a wage-levelling. For example, the head of the department receives this much, and a specialist receives the same amount, on an equal footing. For example, if the employee's salary is 150 thousand, multiply it by five – this is your budget. And the truth is that they are not equally useful for the company and not equally valuable on the market. Some of them worth 70 thousand, and some 500. But the one who worth 70 thousand, will bring you 100 thousand, and the one who worth 500 - will bring you millions. And that is how we have introduced grading system, which is used worldwide in more than 10 thousand companies, including the ones featured in Fortune 500. This ranking is universal. Each one contains skills, responsibility, knowledge, expertise, job content. The hierarchy is based on the specific contribution of the job position to the strategic goals of the company. So the more your position is important and provides deeper contribution, the higher it is in the ranking. Here, for example, the managing director for asset optimization, managing director for strategy and managing director for human resources. They have different depth of the complexity of the issues involved, a different contribution, even though they are all managing directors. And not every chairman of the national company is on the same level as other chairmen. Each one performs certain functions and tasks. So, this ranking system gives us an adequate picture: a specialist of one level worth a lot, and the other level - a little less. Thus, we realize that even with the budget that we have, we can allocate money to hire a really good professional. And in situations when we overpay, we can lower the wages.

- What is the biggest achievement of the transformation programme, in your opinion?

- The biggest one is a project approach, project management. Ability to have projects fully implemented, from A to Z. We can finish a project, call it quits and say, "It works!" Our country needs more of these. Of course, there are some good project managers and they are highly valued. One of them is our project manager born in Kyzylorda, he came from Abu Dhabi and now works with us. We have a special team assigned for Fund’s transformation, where we recruit project managers. Previously, it was  a bit like this: first is initiative, everything is running fine, we prepare great slides, get everything approved, work, work, work; then there is another initiative coming up, here we lose our interest, and already get involved with the tenth project, and that previous ones got left unfinished. And eventually everyone forgets about its existence. We are a kind of an experimental platform, and we are pleased to be one. After all, it all works towards increasing our market value, and not only company’s, but also the staff’s. Because the people, who are involved in this, are soaring in value, as such programmes are very rare around the world.

- To sum up our conversation: could you please tell us, have you reached planned results and what remains to be done?

- We did what we promised to do. Most of the feedbacks are positive. There are, however, negative aspects. This system does not always work well and some people may not have received their feedback and so on. Sometimes I cannot keep up with all requests. But we are trying to communicate with everyone. Because we believe that tomorrow, we will be able to count on these people. Tomorrow they will become good professionals and would want to work here only because they received replies and were not ignored. And we are orienting everyone in tune with this image. When people in our country would say: "Where are you now? – I am with Samruk-Kazyna. - Well done!" That is all I want, it is my job to make our employees proudly wear their badge. And we did what we promised. But now things are going deeper, we are launching a similar process in the portfolio companies, we also declared this publicly. And I would like to express my gratitude to our portfolio companies, for not resisting and adequately reacting to such changes. I was expecting that there would be certain ‘undertows’. But no, every CEO has expressed their readiness. Moreover, they said, let us do it quickly, let us start with us, although we have an annual schedule to follow. Because they quickly want to start working in this environment. I hope that they are "infected" in a good way. We now have a new challenge: do it all in time. We distributed and delegated everything to keep up with our plans, and now it is necessary to mobilize a little bit, to do the job faster.